IDACORP INC

Previous wording

In MD&A in this report, the general financial condition and results of operations for IDACORP and its subsidiaries and Idaho Power Company and its subsidiary are discussed. While reading this MD&A, please refer to the accompanying condensed consolidated financial statements of IDACORP and Idaho Power. Also refer to "Cautionary Note Regarding Forward-Looking Statements" in this report for important information regarding forward-looking statements made in this MD&A and elsewhere in this report. This discussion updates the MD&A included in the 2023 Annual Report, and should also be read in conjunction with the information in that report. The results of operations for an interim period generally will not be indicative of results for the full year, particularly in light of the seasonality of Idaho Power's sales volumes, as discussed below.

Current wording

In MD&A in this report, the general financial condition and results of operations for IDACORP and its subsidiaries and Idaho Power and its subsidiary are discussed. While reading this MD&A, please refer to the accompanying condensed consolidated financial statements of IDACORP and Idaho Power. Also refer to "Cautionary Note Regarding Forward-Looking Statements" in this report for important information regarding forward-looking statements made in this MD&A and elsewhere in this report. This discussion updates the MD&A included in the 2023 Annual Report, and should also be read in conjunction with the information in that report. The results of operations for an interim period generally will not be indicative of results for the full year, particularly in light of the seasonality of Idaho Power's sales volumes, as discussed below.

Previous wording

•Idaho Power continues to focus on timely recovery of costs and earning a reasonable return on investment. In May and June 2024, Idaho Power, the Staff of the OPUC, and certain intervening parties reached three partial settlement stipulations related to Idaho Power's Oregon general rate case filing that was made in December 2023. In addition, on May 31, 2024, Idaho Power filed a limited issue rate case in Idaho. These filings are described more fully in Note 3 - "Regulatory Matters" to the condensed consolidated financial statements included in this report.

Current wording

•Idaho Power continues to focus on timely recovery of costs and earning a reasonable return on investment. In September 2024, the OPUC approved three partial settlement stipulations related to Idaho Power's Oregon general rate case filing that it made in December 2023. In addition, on May 31, 2024, Idaho Power filed a limited-issue rate case in Idaho. These filings are described more fully in Note 3 - "Regulatory Matters" to the condensed consolidated financial statements included in this report.

Previous wording

•Idaho Power continues to expect positive customer growth in its service area. During the first six months of 2024, Idaho Power's customer count grew by over 7,500 customers, and for the twelve months ended June 30, 2024, the customer growth rate was 2.6 percent. Idaho Power reached a new summer peak demand of 3,793 MW on July 22, 2024. The prior highest summer peak demand was 3,751 MW, reached in June 2021.

Current wording

•Idaho Power continues to expect positive customer growth in its service area. During the first nine months of 2024, Idaho Power's customer count grew by over 12,500 customers, and for the twelve months ended September 30, 2024, the customer growth rate was 2.6 percent. Idaho Power reached a new summer peak demand of 3,793 MW on July 22, 2024. The prior highest summer peak demand was 3,751 MW, reached in June 2021.

Previous wording

•To help meet peak capacity and energy needs in 2026 and beyond,

Current wording

•Idaho Power's estimate of capital expenditures from 2024 to 2028, inclusive of amounts spent to-date in 2024, have increased to the range of $5.4 billion to $6.1 billion. Part of the increase is driven by Idaho Power's need to acquire additional power supply resources to meet growing demand. To help meet those growing capacity and energy needs in 2026 and beyond,

Previous wording

◦in March 2024, as part of a competitive RFP process, Idaho Power entered into an energy and capacity market purchase agreement with an energy marketer for the right to acquire 200 MW on a daily basis during summer months beginning in 2026 for a term of at least five years, and requested approval of the agreement from the IPUC; and

Current wording

◦in March 2024, as part of a competitive RFP process, Idaho Power entered into an energy and capacity market purchase agreement with an energy marketer for the right to acquire 200 MW on a daily basis during summer months beginning in 2026 for a term of at least five years;

Previous wording

◦in April 2024, Idaho Power filed a request for a CPCN in its Idaho jurisdiction for the acquisition of 150 MW of new battery storage assets with an expected in-service date in 2026.

Current wording

◦in April 2024 and July 2024, Idaho Power entered into agreements for the acquisition of 200 MW of new battery storage assets with an expected in-service date in June 2026;

Previous wording

•To help address the additional capacity deficits projected for 2026 and 2027, Idaho Power continues to evaluate the short-list of projects submitted in response to its RFP for additional energy and capacity resources. Idaho Power also has in-process RFPs under Oregon's competitive bidding rules for resources intended to be in-service in 2028 or later, to address energy and capacity deficits Idaho Power anticipates in those years.

Current wording

•Idaho Power also has in-process RFPs under Oregon's competitive bidding rules for resources intended to be in-service in 2028 or later, to address future additional energy and capacity deficits.

Previous wording

The following is a summary of Idaho Power's net income, net income attributable to IDACORP, and IDACORP's earnings per diluted share for the three and six months ended June 30, 2024 and 2023 (in thousands, except earnings per share amounts):

Current wording

The following is a summary of Idaho Power's net income, net income attributable to IDACORP, and IDACORP's earnings per diluted share for the three and nine months ended September 30, 2024 and 2023 (in thousands, except earnings per share amounts):

Previous wording

The table below provides a reconciliation of net income attributable to IDACORP for the three and six months ended June 30, 2024, from the same periods in 2023 (items are in millions and are before related income tax impact unless otherwise noted):

Current wording

The table below provides a reconciliation of net income attributable to IDACORP for the three and nine months ended September 30, 2024, from the same periods in 2023 (items are in millions and are before related income tax impact unless otherwise noted):

Previous wording

IDACORP's net income increased $20.9 million for the second quarter of 2024 compared with the second quarter of 2023, due primarily to higher net income at Idaho Power.

Current wording

IDACORP's net income increased $8.3 million for the third quarter of 2024 compared with the third quarter of 2023, due primarily to higher net income at Idaho Power.

Previous wording

The net increase in retail revenues per MWh, net of associated power supply costs and power cost adjustment and FCA mechanisms, increased operating income by $19.6 million in the second quarter of 2024 compared with the second quarter of 2023. This benefit was due primarily to an overall increase in Idaho base rates, effective January 1, 2024, per the terms of the 2023 Settlement Stipulation. For more information on the 2023 Settlement Stipulation, see Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2023 Annual Report.

Current wording

This benefit was due primarily to an overall increase in Idaho base rates, effective January 1, 2024, per the terms of the 2023 Settlement Stipulation. For more information on the 2023 Settlement Stipulation, see Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2023 Annual Report.

Previous wording

At Idaho Power, customer growth increased operating income by $5.1 million in the second quarter of 2024 compared with the second quarter of 2023, as the number of Idaho Power customers grew by approximately 16,200, or 2.6 percent, during the twelve months ended June 30, 2024. Usage per retail customer increased operating income by $6.2 million in the second quarter of 2024 compared with the second quarter of 2023. While there was an increase in usage per customer for all retail customer classes, usage per irrigation customer increased most significantly at 17 percent, as higher temperatures compared with last year's more moderate second quarter weather led irrigation customers to run irrigation pumps more frequently.

Current wording

At Idaho Power, customer growth increased operating income by $7.4 million in the third quarter of 2024 compared with the third quarter of 2023, as the number of Idaho Power customers grew by approximately 16,500, or 2.6 percent, during the twelve months ended September 30, 2024. Usage per retail customer increased operating income by $3.1 million in the third quarter of 2024 compared with the third quarter of 2023. While there was an increase in usage per customer for most retail customer classes, usage per residential and irrigation customers were the primary contributors. Higher temperatures and lower precipitation compared with the third quarter of 2023 led residential customers to use more energy for cooling purposes and irrigation customers to run irrigation pumps more frequently.

Previous wording

Total other O&M expenses in the second quarter of 2024 were $13.8 million higher than in the second quarter of 2023, primarily related to approximately $4 million of increased pension-related expenses and approximately $8 million of increase in wildfire mitigation program and related insurance expenses. Both of these increases in expenses were partially offset by increases in retail revenues, as more costs are now recovered in base rates pursuant to the 2023 Settlement Stipulation. However, revenues related to these increased costs are not collected at the same rate that the expenses are incurred in the interim periods throughout the year due to the impact of volume-based rates and associated revenues. Inflationary pressures on labor-related costs also contributed to the increase in other O&M expenses.

Current wording

Total other O&M expenses in the third quarter of 2024 were $20.3 million higher than the third quarter of 2023, partially related to approximately $4 million of increased pension-related expenses and an approximate $6 million increase in wildfire mitigation program and related insurance expenses. Both of these increases in expenses were partially offset by increases in retail revenues, as more costs are now recovered in base rates pursuant to the 2023 Settlement Stipulation. However, revenues related to these increased costs are not collected at the same rate that the expenses are incurred in the interim periods throughout the year due to the impact of volume-based rates and associated revenues. Inflationary pressures on labor-related costs also contributed to the increase in other O&M expenses. These increases in other O&M expenses were partially offset by a $2.9 million deferral of other O&M expenses related to the conversion from coal to natural gas for two units at the Jim Bridger plant.

Previous wording

Depreciation expense increased $7.6 million in the second quarter of 2024 compared with the second quarter of 2023 due primarily to an increase in plant-in-service.

Current wording

Depreciation expense increased $5.6 million in the third quarter of 2024 compared with the third quarter of 2023 due primarily to an increase in plant-in-service.

Previous wording

Other changes in operating revenues and expenses, net, increased operating income by $13.9 million in the second quarter of 2024 compared with the second quarter of 2023, due primarily to the timing of recording and adjusting regulatory accruals and deferrals. In addition, a decrease in net power supply expenses that were not deferred for future recovery in rates through Idaho Power's power cost adjustment mechanisms increased operating revenues and expenses, net, compared with the same period in 2023. More moderate wholesale natural gas and power market prices in the western United States and increased wholesale energy sales decreased Idaho Power's net power supply expenses in the second quarter of 2024 compared with the second quarter of 2023.

Current wording

Other changes in operating revenues and expenses, net, increased operating income by $3.3 million in the third quarter of 2024 compared with the third quarter of 2023, due primarily to a decrease in net power supply expenses that were not deferred for future recovery in rates through Idaho Power's power cost adjustment mechanisms, which increased other changes in operating revenues and expenses, net, compared with the same period in 2023. More moderate and less volatile wholesale natural gas and power market prices in the western United States and increased wholesale energy sales decreased Idaho Power's net power supply expenses in the third quarter of 2024 compared with the third quarter of 2023.

Previous wording

Non-operating expense, net, increased $0.4 million in the second quarter of 2024 compared with the second quarter of 2023. Interest expense on long-term debt was higher in the second quarter of 2024 compared with the second quarter of 2023, due primarily to an increase in long-term debt. This increase was partially offset by an increase in AFUDC, as the average construction work in progress balance was higher. Also, interest income increased due to higher interest rates and higher average cash and cash equivalent balances.

Current wording

Non-operating expense, net, decreased $2.4 million in the third quarter of 2024 compared with the third quarter of 2023. AFUDC increased in the third quarter of 2024 compared with the third quarter of 2023, as the average construction work in progress balance was higher, and interest income increased due to higher average cash balances and interest rates. These increases were partially offset by an increase in interest expense on long-term debt in the third quarter of 2024 compared with the third quarter of 2023, due primarily to an increase in long-term debt balances. Also offsetting the increases, Idaho Power's earnings from its investment in BCC decreased $2.2 million in the third quarter of 2024 compared with the third quarter of 2023, due to a decrease in the amount included and recovered in base rates pursuant to the 2023 Settlement Stipulation.

Previous wording

The increase in income tax expense was principally the result of higher income before income taxes, partially offset by an increase in additional ADITC amortization. Based on Idaho Power's current expectations of full-year 2024 results, Idaho Power recorded $7.5 million of additional ADITC amortization under its Idaho regulatory settlement stipulation during the second quarter of 2024, but only recorded $3.75 million of additional ADITC amortization during the same period in 2023.

Current wording

The increase in income tax expense was principally the result of higher income before income taxes, partially offset by an increase in additional ADITC amortization. Based on Idaho Power's current expectations of full-year 2024 results, Idaho Power recorded $2.5 million of additional ADITC amortization under its Idaho regulatory settlement stipulation during the third quarter of 2024, but recorded no additional ADITC amortization during the same period in 2023.

Previous wording

IDACORP's net income increased $13.0 million for the first six months of 2024 compared with the first six months of 2023, due primarily to higher net income at Idaho Power.

Current wording

IDACORP's net income increased $21.4 million for the first nine months of 2024 compared with the first nine months of 2023, due primarily to higher net income at Idaho Power.

Previous wording

The net increase in retail revenues per MWh, net of associated power supply costs and power cost adjustment and FCA mechanisms, increased operating income by $24.4 million in the first six months of 2024 compared with the first six months of 2023. This benefit was due primarily to an overall increase in Idaho base rates, effective January 1, 2024, per the terms of the 2023 Settlement Stipulation.

Current wording

The net increase in retail revenues per MWh, net of associated power supply costs and power cost adjustment and FCA mechanisms, increased operating income by $44 million in the first nine months of 2024 compared with the first nine months of 2023. This benefit was due primarily to an overall increase in Idaho base rates, effective January 1, 2024, per the terms of the 2023 Settlement Stipulation.

Previous wording

Transmission wheeling-related revenues, net of PCA impacts, decreased $2.5 million during the second quarter of 2024 compared with the second quarter of 2023. This decrease was due primarily to the inclusion of financial settlement of transmission line losses in the PCA mechanism, effective January 1, 2024, as approved in the 2023 Settlement Stipulation, resulting in a smaller contribution of those revenues to net income compared with the second quarter of 2023 when the financial settlement of transmission line losses was not subject to the PCA mechanism.

Current wording

Transmission wheeling-related revenues, net of PCA impacts, decreased $3.0 million during the first nine months of 2024 compared with the first nine months of 2023. Effective January 1, 2024, financial settlement of transmission line losses are subject to the PCA mechanism, as approved in the 2023 Settlement Stipulation, resulting in a smaller contribution of those revenues to net income compared with the first nine months of 2023 when the financial settlement of transmission line losses was not subject to the PCA mechanism.

Previous wording

Total other O&M expenses in the first six months of 2024 were $27.6 million higher than the first six months of 2023, primarily related to approximately $9 million of increased pension-related expenses and an approximately $16 million increase in wildfire mitigation program and related insurance expenses. Both of these increases in expenses are partially offset by increases in retail revenues, as more costs are now recovered in base rates pursuant to the 2023 Settlement Stipulation; however, revenues related to these increased costs are not collected at the same rate that the expenses are incurred in the interim periods throughout the year. On a full-year basis for 2024, Idaho Power expects other O&M expenses related to its employee pension plans and its wildfire mitigation program and related insurance to increase approximately $18 million and $30 million, respectively, compared with 2023, as more costs are now recovered in base rates pursuant to the 2023 Settlement Stipulation. Inflationary pressures on labor-related costs also contributed to the increase in other O&M expenses.

Current wording

Total other O&M expenses in the first nine months of 2024 were $47.9 million higher than the first nine months of 2023, partially related to approximately $13 million of increased pension-related expenses and an approximate $22 million increase in wildfire mitigation program and related insurance expenses. Both of these increases in expenses were partially offset by increases in retail revenues, as more costs are now recovered in base rates pursuant to the 2023 Settlement Stipulation; however, revenues related to these increased costs are not collected at the same rate that the expenses are incurred in the interim periods throughout the year. On a full-year basis for 2024, Idaho Power expects other O&M expenses related to its employee pension plans and its wildfire mitigation program and related insurance to increase approximately $18 million and $30 million, respectively, compared with 2023. Inflationary pressures on labor-related costs also contributed to the increase in other O&M expenses. These increases were partially offset by a $9.1 million increase in deferral of other O&M expenses related to the conversion from coal to natural gas for two units at the Jim Bridger plant.

Previous wording

Depreciation expense increased $16.2 million for the first half of 2024 compared with the first half of 2023 due primarily to an increase in plant-in-service.

Current wording

Depreciation expense increased $21.8 million for the first nine months of 2024 compared with the first nine months of 2023 due primarily to an increase in plant-in-service.

Previous wording

Other changes in operating revenues and expenses, net, increased operating income by $18.6 million in the first six months of 2024 compared with the first six months of 2023, due primarily to the timing of recording and adjusting of regulatory accruals and deferrals. In addition, a decrease in net power supply expenses that were not deferred for future recovery in rates through Idaho Power's power cost adjustment mechanisms increased operating revenues and expenses, net, compared to the same period in 2023. More moderate wholesale natural gas and power market prices in the western United States and increased wholesale energy sales decreased Idaho Power's net power supply expenses in the first six months of 2024 compared to the first six months of 2023.

Current wording

Other changes in operating revenues and expenses, net, increased operating income by $21.8 million in the first nine months of 2024 compared with the first nine months of 2023, due partially to a decrease in net power supply expenses that were not deferred for future recovery in rates through Idaho Power's power cost adjustment mechanisms, which increased other changes in operating revenues and expenses, net, compared with the same period in 2023. More moderate wholesale natural gas and power market prices in the western United States and increased wholesale energy sales decreased Idaho Power's net power supply expenses in the first nine months of 2024 compared with the first nine months of 2023. The change was also partially due to the timing of recording and adjusting regulatory accruals and deferrals.

Previous wording

Non-operating expense, net, increased $2.3 million in the first six months of 2024 compared with the first six months of 2023. Interest expense on long-term debt was higher in the first six months of 2024 compared with the first six months of 2023, due primarily to an increase in long-term debt. This increase was partially offset by an increase in AFUDC, as the average construction work in progress balance was higher. Also, interest income increased due to higher interest rates and higher average cash and cash equivalent balances.

Current wording

Non-operating expense, net, decreased $0.2 million in the first nine months of 2024 compared with the first nine months of 2023. AFUDC increased in the first nine months of 2024 compared with the first nine months of 2023, as the average construction work in progress balance was higher. In addition, interest income increased due to higher average cash balances and interest rates compared with the same period in 2023. These increases were partially offset by an increase in interest expense on long-term debt in the first nine months of 2024 compared with the first nine months of 2023, due primarily to an increase in long-term debt balances. Also offsetting the increases, Idaho Power's earnings from its investment in BCC decreased $5.5 million in the first nine months of 2024 compared with the first nine months of 2023, due to a decrease in the amount included and recovered in base rates pursuant to the 2023 Settlement Stipulation.

Previous wording

•Regulation of Rates and Cost Recovery; Rate Case Filings: The prices that Idaho Power is authorized to charge for its electric and transmission service are a critical factor in determining IDACORP's and Idaho Power's results of operations and financial condition. Those rates are established by state regulatory commissions and the FERC and are intended to allow Idaho Power an opportunity to recover its expenses and earn a reasonable return on investment. Idaho Power is focused on timely recovery of its costs through filings with its regulators, working to put in place innovative regulatory mechanisms, and prudent management of expenses and investments. The 2023 Settlement Stipulation provides for the accelerated amortization of ADITC to help achieve a minimum 9.12 percent Idaho ROE. The 2023 Settlement Stipulation also provides for the potential sharing between Idaho Power and its Idaho customers of Idaho-jurisdictional earnings in excess of a 9.6 percent Idaho ROE. The specific terms of the 2023 Settlement Stipulation are described in Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2023 Annual Report.

Current wording

•Regulation of Rates and Cost Recovery; Rate Case Filings: The prices that Idaho Power is authorized to charge for its electric and transmission service are a critical factor in determining IDACORP's and Idaho Power's results of operations and financial condition. Those rates are established by state regulatory commissions and the FERC and are intended to allow Idaho Power an opportunity to recover its expenses and earn a reasonable return on investment. Idaho Power is focused on timely recovery of its costs through filings with its regulators, working to put in place innovative regulatory mechanisms, and prudent management of expenses and investments. The 2023 Settlement Stipulation provides for the accelerated amortization of ADITC, if necessary, to help achieve a minimum 9.12 percent Idaho ROE. The 2023 Settlement Stipulation also provides for the potential sharing between Idaho Power and its Idaho customers of Idaho-jurisdictional earnings in excess of a 9.6 percent Idaho ROE. The specific terms of the 2023 Settlement Stipulation are described in Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2023 Annual Report.

Previous wording

To address the regulatory lag in recovery of costs primarily associated with Idaho Power’s current and anticipated significant infrastructure investments, including those that are intended to help meet projected near-term capacity deficits, Idaho Power filed a limited-issue rate case in Idaho on May 31, 2024. Idaho Power expects the processing of this limited-issue rate case in Idaho will span at least seven months before new rates would be in effect. In December 2023, Idaho Power made a general rate case filing in Oregon, which is described more fully in Note 3 - "Regulatory Matters" to the condensed consolidated financial statements included in this report. In May and June 2024, Idaho

Current wording

To address the regulatory lag in recovery of costs primarily associated with Idaho Power’s current and anticipated significant infrastructure investments, including those that are intended to help meet projected near-term capacity deficits, Idaho Power filed a limited-issue rate case in Idaho on May 31, 2024. Idaho Power expects the processing of this limited-issue rate case in Idaho will span at least seven months before new rates would be in effect. In December 2023, Idaho Power made a general rate case filing in Oregon, which is described more fully in Note 3 - "Regulatory Matters" to the condensed consolidated financial statements included in this report. In September 2024 the OPUC approved the 2024 Oregon Settlement Stipulations related to Idaho Power's Oregon general rate case filing.

Previous wording

Idaho Power's 2023 IRP assumed a forecasted annual growth in retail MWh sales of 5.5 percent and a forecasted annual growth in peak-hour demand of 3.7 percent over the upcoming 5-year period. For more information on the 2023 IRP, refer to "Resource Planning" in Item 1 - "Business" of the 2023 Annual Report. Customer growth has contributed to increases in peak loads experienced in recent years. For example, Idaho Power's highest all-time winter peak demand of 2,719 MW occurred on January 16, 2024 and on July 22, 2024, Idaho Power reached a new all-time summer peak demand of 3,793 MW. Idaho Power's prior all-time summer peak demand was 3,751 MW, set in June 2021. Idaho Power believes that existing and sustained growth in customers, load, and peak demand for electricity, along with changes in the regional transmission markets that have constrained the availability of transmission outside Idaho Power’s service area to import energy during peak load periods, require Idaho Power to increase its investment in capacity resources, transmission, and distribution infrastructure. This includes the B2H and GWW transmission projects, along with other capacity, energy, and transmission resource procurements, as described in "Liquidity and Capital Resources" in this MD&A.

Current wording

3,751 MW, set in June 2021. Idaho Power believes that existing and sustained growth in customers, load, and peak demand for electricity, along with changes in the regional transmission markets that have constrained the availability of transmission outside Idaho Power’s service area to import energy during peak load periods, require Idaho Power to increase its investment in capacity resources, transmission, and distribution infrastructure. This includes the B2H and GWW transmission projects, along with other capacity, energy, and transmission resource procurements, described in "Liquidity and Capital Resources" in this MD&A.

Previous wording

Further, as Idaho Power's hydropower facilities comprise over one-half of Idaho Power's nameplate generation capacity, precipitation levels impact the mix of Idaho Power's generation resources. When hydropower generation decreases, Idaho Power must rely on more expensive generation sources and purchased power. When favorable hydropower generating conditions exist for Idaho Power, they also may exist for other Pacific Northwest hydropower facility operators, lowering regional wholesale market prices and impacting the revenue Idaho Power receives from wholesale energy sales. Much of the adverse or favorable impact of this volatility is addressed through the Idaho and Oregon power cost adjustment mechanisms, which mitigate in large part the impact on earnings. For 2024, Idaho

Current wording

Further, as Idaho Power's hydropower facilities comprise over one-half of Idaho Power's nameplate generation capacity, precipitation levels impact the mix of Idaho Power's generation resources. When hydropower generation decreases, Idaho Power must rely on more expensive generation sources and purchased power. When favorable hydropower generating conditions exist for Idaho Power, they also may exist for other Pacific Northwest hydropower facility operators, lowering regional wholesale market prices and impacting the revenue Idaho Power receives from wholesale energy sales. Much of the adverse or favorable impact of this volatility is addressed through the Idaho and Oregon power cost adjustment mechanisms, which mitigate in large part the impact on earnings. For 2024, Idaho Power expects generation from its hydropower resources to be in the range of 7.0 million to 7.5 million MWh, compared with actual generation of 6.5 million MWh in 2023 and a 30-year average annual total of approximately 7.6 million MWh.

Previous wording

•Regulatory and Environmental Compliance Costs; Coal Plant Retirements: Idaho Power is subject to extensive federal and state laws, policies, and regulations, as well as regulatory actions and audits by agencies and quasi-governmental agencies, including the FERC, the North American Electric Reliability Corporation, and the Western Electricity Coordinating Council. Compliance with these requirements directly influences Idaho Power's operating environment and affects Idaho Power's operating costs. Moreover, environmental laws and regulations may increase the cost of constructing new facilities, may increase the cost of operating generation plants, may require that Idaho Power install additional pollution control devices at existing generating plants, may result in penalties for non-compliance, even where inadvertent, or may require that Idaho Power curtail or cease operating certain generation plants. Idaho Power expects to spend significant amounts on environmental compliance and controls for the foreseeable future. Due to economic factors in part associated with the costs of compliance with environmental regulation, Idaho Power accelerated the retirement date of its jointly-owned coal-fired generating plant in North Valmy, Nevada (North Valmy plant), ceasing coal-fired operations at one unit in 2019 and planning to cease its participation in coal-fired operations at the remaining unit by year-end 2025. Idaho Power's jointly-owned coal plant in Boardman, Oregon, ceased operations as planned in October 2020. In 2022, the IPUC approved Idaho Power's request to allow the coal-related assets at the Jim Bridger plant to be fully depreciated and recovered by end-of-year 2030. Idaho Power's 2023 IRP identified a preferred resource portfolio and action plan that includes the conversion from coal to natural gas of two units at the Jim Bridger plant in 2024, the two units at the North Valmy plant in 2026, and the remaining two units at the Jim Bridger plant in 2030. Units 1 and 2 at the Jim Bridger plant were successfully converted to natural gas in the second quarter of 2024 and, in June 2024, Idaho Power executed an agreement with its co-owner to facilitate the planned conversion of the two units at the North Valmy plant from coal to natural gas by mid-2026. For more information on the 2023 IRP, refer to "Resource Planning" in Item 1 – "Business" of the 2023 Annual Report.

Current wording

•Regulatory and Environmental Compliance Costs; Coal Plant Retirements: Idaho Power is subject to extensive federal and state laws, policies, and regulations, as well as regulatory actions and audits by agencies and quasi-governmental agencies, including the FERC, the North American Electric Reliability Corporation, and the Western Electricity Coordinating Council. Compliance with these requirements directly influences Idaho Power's operating environment and affects Idaho Power's operating costs. Moreover, environmental laws and regulations may increase the cost of constructing new facilities, may increase the cost of operating generation plants, may require that Idaho Power install additional pollution control devices at existing generating plants, may result in penalties for non-compliance, even where inadvertent, or may require that Idaho Power curtail or cease operating certain generation plants. Idaho Power expects to spend significant amounts on environmental compliance and controls for the foreseeable future. Due to economic factors in part associated with the costs of compliance with environmental regulation, Idaho Power accelerated the retirement date of its North Valmy plant, ceasing coal-fired operations at one unit in 2019 and planning to cease its participation in coal-fired operations at the remaining unit by year-end 2025. Idaho Power's jointly-owned coal plant in Boardman, Oregon, ceased operations as planned in October 2020. In 2022, the IPUC approved Idaho Power's request to allow the coal-related assets at the Jim Bridger plant to be fully depreciated and recovered by end-of-year 2030. Idaho Power's 2023 IRP identified a preferred resource portfolio and action plan that includes the conversion from coal to natural gas of two units at the Jim Bridger plant in 2024, the two units at the North Valmy plant in 2026, and the remaining two units at the Jim Bridger plant in 2030. Units 1 and 2 at the Jim Bridger plant were successfully converted to natural gas in the second quarter of 2024. In July 2024, Idaho Power executed an agreement with its co-owner to facilitate the planned conversion of the two units at the North Valmy plant from coal to natural gas by mid-2026.

Previous wording

•Wildfire Mitigation Efforts: In recent years, the western United States has experienced an increasing number of wildfires of unprecedented severity. A variety of factors have contributed to this trend including climate change, increased wildland-urban interfaces, historical land management practices, and overall wildland and forest health. While Idaho Power has not experienced to-date the extent of catastrophic wildfires within its service area that have occurred in the western United States and elsewhere, Idaho Power is taking a proactive approach to wildfire risk in its service area and transmission corridors. Idaho Power has adopted a WMP that outlines actions Idaho Power is taking or is working to implement to reduce wildfire risk and to strengthen the resiliency of its transmission and distribution system to wildfires. Idaho Power's approach to achieve these objectives includes identifying areas subject to elevated risk; system hardening programs, vegetation management, and field personnel practices to mitigate wildfire risk;

Current wording

•Wildfire Mitigation Efforts: In recent years, the western United States has experienced an increasing number of wildfires of unprecedented severity. A variety of factors have contributed to this trend including climate change, increased wildland-urban interfaces, historical land management practices, and overall wildland and forest health. Idaho Power is taking a proactive approach to wildfire risk in its service area and transmission corridors. Idaho Power has adopted a WMP that outlines actions Idaho Power is taking or is working to implement to reduce wildfire risk and to strengthen the resiliency of its transmission and distribution system to wildfires. Idaho Power's approach to achieve these objectives includes identifying areas subject to elevated risk; system hardening programs, vegetation management, and field personnel practices to mitigate wildfire risk; incorporating current and forecasted weather and field conditions into operational practices; public safety power shutoff protocols; and evaluating the performance and effectiveness of the strategies identified in the WMP through metrics and monitoring. Idaho Power has a regulatory mechanism that allows the company to defer, for future amortization, the Idaho jurisdictional share of certain actual incremental O&M expenses necessary to implement the WMP. In January 2024, the OPUC authorized Idaho Power's request to defer the Oregon jurisdictional share of costs associated with the WMP for the 12-month period beginning December 29, 2022, and ending on December 28, 2023. The WMP regulatory deferrals are described in more detail in Note 3 - "Regulatory Matters" to the consolidated financial statements included in the 2023 Annual Report.

Previous wording

This section of MD&A takes a closer look at the significant factors that affected IDACORP’s and Idaho Power’s earnings during the three months and six months ended June 30, 2024. In this analysis, the results for the three months and six months ended June 30, 2024, are compared with the same periods in 2023.

Current wording

This section of MD&A takes a closer look at the significant factors that affected IDACORP’s and Idaho Power’s earnings during the three months and nine months ended September 30, 2024. In this analysis, the results for the three months and nine months ended September 30, 2024, are compared with the same periods in 2023.

Previous wording

The table below presents Idaho Power’s energy sales and supply (in thousands of MWh) for the three months and six months ended June 30, 2024 and 2023.

Current wording

The table below presents Idaho Power’s energy sales and supply (in thousands of MWh) for the three months and nine months ended September 30, 2024 and 2023.

Previous wording

(1) "Steam generation" is composed of generation from steam plants that are fueled only by coal or by both coal and natural gas.

Current wording

(1) "Steam generation" is composed of generation from steam plants that are fueled by only coal or by both coal and natural gas.

Previous wording

Weather-related information for Boise, Idaho, for the three months and six months ended June 30, 2024 and 2023, is presented in the table below. While Boise, Idaho weather conditions are not necessarily representative of weather conditions throughout Idaho Power's service area, the greater Boise area has the majority of Idaho Power's customers and is included for illustrative purposes.

Current wording

Weather-related information for Boise, Idaho, for the three months and nine months ended September 30, 2024 and 2023, is presented in the table below. While Boise, Idaho weather conditions are not necessarily representative of weather conditions throughout Idaho Power's service area, the greater Boise area has the majority of Idaho Power's customers and is included for illustrative purposes.

Previous wording

Sales Volume and Generation: Retail sales volumes increased 6 percent and 2 percent in the second quarter and first six months of 2024, respectively, compared with the same periods in 2023, primarily due to growth in the number of Idaho Power customers and, in the second quarter of 2024, an increase in usage per irrigation customer. The number of Idaho Power's customers grew by 2.6 percent over the prior twelve months and higher temperatures in the second quarter of 2024 compared with last year's more moderate second quarter weather led irrigation customers to run irrigation pumps more frequently, contributing to the higher volumes.

Current wording

Sales Volume and Generation: Retail sales volumes increased 4 percent and 3 percent in the third quarter and first nine months of 2024, respectively, compared with the same periods in 2023, primarily due to growth in the number of Idaho Power customers and, in the third quarter of 2024, an increase in usage per residential and irrigation customers. The number of Idaho Power's customers grew by 2.6 percent over the prior twelve months, and higher temperatures in the third quarter of 2024 compared with last year's more moderate third quarter weather led irrigation customers to run irrigation pumps more frequently, contributing to the higher volumes.

Previous wording

Total system generation increased 19 percent for the second quarter and 21 percent in the first six months of 2024 compared with the same periods in 2023, which consists of an increase in hydropower generation, steam generation, and natural gas generation. For more information on the changes in generation, see the "Operating Expenses" section below in this MD&A.

Current wording

Total system generation increased 15 percent for the third quarter and 19 percent in the first nine months of 2024 compared with the same periods in 2023, which consists of an increase in hydropower generation, steam generation, and natural gas generation. For more information on the changes in generation, see the "Operating Expenses" section below in this MD&A.

Previous wording

Retail Revenues: The table below presents Idaho Power’s retail revenues (in thousands) and MWh sales volumes (in thousands) for the three months and six months ended June 30, 2024 and 2023, and the number of customers as of June 30, 2024 and 2023.

Current wording

Retail Revenues: The table below presents Idaho Power’s retail revenues (in thousands) and MWh sales volumes (in thousands) for the three months and nine months ended September 30, 2024 and 2023, and the number of customers as of September 30, 2024 and 2023.

Previous wording

Retail revenues increased $45.8 million and $58.2 million during the second quarter and first six months of 2024, respectively, compared with the same periods in 2023. The factors affecting retail revenues during the periods are discussed below.

Current wording

Retail revenues increased $27.4 million and $85.7 million during the third quarter and first nine months of 2024, respectively, compared with the same periods in 2023. The factors affecting retail revenues during the periods are discussed below.

Previous wording

•Rates: Average customer rates, excluding amounts related to the power cost adjustment mechanisms, increased retail revenues by $28.8 million and $42.4 million, respectively, for the three and six months ended June 30, 2024, compared with the same periods in 2023, due primarily to the January 1, 2024, rate increase for Idaho Power's retail customers related to the 2023 Settlement Stipulation. Customer rates also include the collection from customers of amounts related to the power cost adjustment mechanisms, which increased revenues by $6.9 million and $22.5 million in the second quarter and first six months of 2023, respectively, compared with the same periods of 2024. The amount collected from customers in rates under the power cost adjustment mechanisms has relatively little effect on operating income as a corresponding amount is recorded as expense in the same period it is collected through rates. FCA revenue accrued in the three and six months ended June 30, 2024, decreased by $8.1 million and $18.0 million compared with the same periods in 2023, respectively, as the 2023 Settlement Stipulation moved a greater portion of recovery of fixed costs into customer base rates.

Current wording

•Rates: Average customer rates, excluding amounts related to the power cost adjustment mechanisms, increased retail revenues by $34.4 million and $74.2 million, respectively, for the three and nine months ended September 30, 2024, compared with the same periods in 2023, due primarily to the January 1, 2024 rate increase for Idaho Power's retail customers under the 2023 Settlement Stipulation. Customer rates also include the collection from customers of amounts related to the power cost adjustment mechanisms, which decreased revenues by $10.8 million and increased revenues by $11.8 million in the third quarter and first nine months of 2023, respectively, compared with the same periods of 2023. The amount collected from customers in rates under the power cost adjustment mechanisms has relatively little effect on operating income as a corresponding amount is recorded as expense in the same period it is collected through rates. FCA revenue accrued in the three and nine months ended September 30, 2024, decreased by

Previous wording

•Usage: Higher usage (on a per customer basis) in all customer classes increased retail revenues by $10.6 million for the second quarter of 2024 compared with the same period in 2023. Warmer summer weather in June 2024 led to a 17 percent increase in energy usage per irrigation customer to run irrigation pumps during the three months ended June 30, 2024, compared with the same period in 2023. During the first six months of 2024, lower usage in most customer classes reduced retail revenues by $5.1 million compared with the same period in 2023. Usage per residential customer decreased most significantly, as more moderate temperatures from January through May 2024 led residential customers to use less energy for heating purposes. However, warmer weather in June 2024 led to an increase in energy usage per residential customer for cooling purposes, and an increase in energy usage per irrigation customer, which partially offset the decrease in usage per residential customer from January through May 2024.

Current wording

•Usage: Higher usage (on a per customer basis) in most customer classes increased retail revenues by $4.0 million and $1.4 million, respectively, for the three and nine months ended September 30, 2024, compared with the same periods in 2023. Warmer and drier summer weather led to increased usage per residential customer for cooling and increased usage per irrigation customer for pump irrigation during the three months ended September 30, 2024, compared with the same period in 2023. During the first nine months of 2024, usage per residential customer decreased, as more moderate temperatures from January through May 2024 led residential customers to use less energy for heating purposes. However, warmer weather during the summer of 2024 led to an increase in energy usage per residential customer for cooling purposes, and an increase in energy usage per irrigation customer, which more than offset the decrease in usage per residential customer from January through May 2024.